Florida homeowners insured by Citizens will see their premiums increase. Citizens Homeowners rates are going to increase by 6.3%. State regulators approved an increase in homeowner’s rates that followed the statewide average. Homeowners with multiperil policies will see a 4.4% increase, which amount to around one hundred and eleven dollars ($111) per policy. Those homeowners that have wind-only policies will see a 10.5% increase on average, which amount to around two-hundred and sixty-five dollars ($265) per policy holder.

Citizens maintained that exposure to hurricanes and sinkholes were the “major drivers” behind the need for the rate hikes this year.

These rate changes will take effect in January, 2014, although the wind-only policy homeowner’s rates will change come February, 2014. These rates are increasing for the fourth consecutive year.

The good news for some homeowners with regards to higher rates is that your policy may never see the rate increase. By the end of November, which also happens to be the end of hurricane season Citizens will remove 400,000 policies to ten different insurers. On top of these 400,000 policy holders, Citizens is now in the process of getting rid of another 200,000 policy holders this December between eight separate insurers. This means that 600,000 policies will be unloaded before the New Year, and the policy holders will not be affected by the rate increase to these homeowner’s policies.

On top of all these changes, Citizens is establishing a clearinghouse, which will allow for policies to be shopped to the private market rather than given away like they are now. This is supposed to be better for homeowners as it will allow them a chance to pick which private insurance company they choose. This is in the hopes that Citizens will be able to unload a more significant amount of policies in their attempt to downsize. All homeowners with a Citizens policy should be aware of the ongoing changes with Citizens and be on the look out for all notices regarding your home insurance policy.
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Citizens Property Insurance is aggressively downsizing, which has caused many smaller insurers to take on their policies. They have been downsizing because Gov. Scott believes they need to lower risks. To the average person this seems like a good thing as smaller companies will continue to grow. However, the smaller insurers’ success when taking over the insurance policies from Citizens has proved otherwise. The companies who receive these policies from Citizens are considered to be “Takeout” firms.

Takeout firms receive policies from Citizens usually in agreement to receive money along with the policies. Once the policies are removed from citizens then the policy holder’s agent is notified of an offer to accept the takeout deal. If the agent denies the offer then the same offer will be made to the policy holder, who may refuse to allow the policy to be removed from Citizens.

What does all of this mean? Basically Citizens is paying lots of money to relatively new and small insurers who are not always equipped enough to handle this quantity of policies. This is why it is incumbent upon all Florida policy holders to check the financial strength of their insurance company.

For instance, Citizens agreed to pay Heritage Property and Casual Insurance, a nine month old company, $52 million to take over 60,000 policies. As a result of this homeowners will receive letters from Heritage and have 30 days to opt out before they are automatically removed from Citizens.

Many believe that companies such as Heritage are not capable of taking on such policies, especially in the event of a hurricane. There is evidence to back this belief as many companies who have taken over policies from Citizens have become insolvent.

The negative effective of these companies becoming insolvent is tax payers coming out of pocket for more then $400 million. This is not a good sign as Citizens is starting to intensify its effort to turn over policies to smaller insurers.

It seems as though Citizens intended purpose of lowering risk by removing these policies is actually causing more risk as smaller firms are becoming insolvent and tax payers are taking on the cost.

Many Florida policyholders can expect to see yet another spike in their already high insurance rates at their next renewal. This rate increase is expected to take place even though a major hurricane hasn’t made a direct hit with the state in over seven years.

Yet despite our good fortune, statistics show the average Florida homeowner is paying twice the rates they were charged six years ago, and some are paying even more than that. Many in the industry place the blame on the number of claims submitted to the insurance companies; claims are up 17% over the past ten years, most due to non-catastrophic water damage like leaky toilets, and broken water heaters.

Others are blaming the increase on a lack of competition in the insurance business in Florida. The largest provider in the state, Citizens Property Insurance Corporation is often the only option for many homeowners who can’t obtain policies through private companies.

Citizen’s policyholders have seen an increase of 8.1% statewide in their rates over the last four years, and that trend doesn’t seem to be ending anytime soon.

Yet others argue simple greed is the root of the problem.

Some argue that insurance companies are all to quick to accept insurance premiums, but often times they are just as quick to deny legitimate claims in an effort to potentially maximize profits.

Citizen’s new President argues the company would have to increase rates on all its products by 16.4% to be comparable with the market rates a private company would charge. One Citizens’ board member blames the number of policies and the low rates, calling it a “competitive drag” for the state. Governor Scott agrees that more private companies may be willing to provide coverage if Citizens was reduced in size. Because private companies know they can’t compete with government, no matter what they’re selling. Even so, many homeowners currently insured by Citizens are being shifted to private companies as the corporation attempts to downsize, and many are left to wonder what kind of coverage they can expect from these private companies.

However, rates and coverage don’t seem to be the only issues. Some Citizen’s policyholders are apprehensive about switching to a private company because they believe that there’s more money available to Citizens so they’re more likely to receive a payout if a claim is necessary.

Until there is real meaningful reform this problem will continue to exist in Florida. And Floridians may not be so lucky when the next “big one” hits Florida. Please read our proposed list of reforms that we feel will only help to strengthen the insurance market as a whole.

With the 2013 Florida legislative session about to begin, it is time to start talking about potential reforms to help consumers understand what home insurance products they are in fact purchasing. Florida continues to be plagued by scandal to Citizens insurance, coupled with sky rocketing insurance rates. Not only that, but too often Florida homeowners are not properly advised of the scope of insurance coverages that they are in fact purchasing.

As we head into the next legislative session, here are some thoughts on how we can help make the insurance market more transparent for both insurance companies and homeowners alike:

(1) Push for a single policy that serves as a minimum baseline of coverage. Too often we see insurance companies writing different coverages and different exclusions. Here is a NY Times article discussing this very issue in great detail. Promulgate a single policy that everyone must use and adopt, and this will make it much easier for everyone to understand exactly what is being purchased.

(2) For a consumer to understand what they are buying they really need to rely on their insurance agent. The insurance agent needs to understand the difference between say an HO3 policy v. a HO6 policy. And if they do understand the difference, the actual coverage purchased may be watered down by certain exclusion or cap on damages (see no. 1 above). To correct this issue, Florida should adopt some type of graph that makes it easy for the consumer to grasp what they are in fact purchasing. A “nutritional label” or pyramid scheme of coverages would help the unsuspecting consumer understand what they are purchasing. So we should not only make the policies consistent, but we should make it easier for the consumer to understand what they are purchasing too by providing some form of graph or pyramid so they could actually see the scope of coverages being provided.

(3) Everyone likes disclosure. And with insurance, the old adage is important – you don’t need it until you need it. But too often there are some insurance companies that are simply too quick to deny a claim. But those are often the insurance companies that offer the best rates. So consumers should understand what they are purchasing, and from whom. The consumer should be provided with the variables regarding that insurance company. In other words, the consumer should not only be provided with information regarding the financial strength of the company in the event of a catastrophic loss, but the consumer should also be provided information regarding information pertaining to (a) the percentage of claims denied, (b) the average time within which claims are paid, and (c) the frequency of non-renewal or cancellation within a year of a claim being submitted.

(4) In an effort to promote more competition in the market, and encourage more insurers to enter the market, there should be goals that are established that would permit the complete abandonment (or loosening) of price regulation designed to suppress insurance rates so long as a certain number of companies are in the state of Florida providing insurance coverage. By the same token, extreme pressure should be put on those companies that want to offer insurance for all of our cars (and boats) to make sure that they also offer homeowners policies too. Possibly providing some form of financial incentives to enter the market may also be useful to get the insurance companies to do this too.

(5) Insurance agents should receive the same amount of compensation regardless of the carrier with which they place consumers. Too often insurance agents may attempt to steer a consumer to insurance company A because the financial incentives may be better than if insurance company B were selected by the consumer. But that also assumes that there is/was a choice for the homeowner/consumer – something many of us don’t have given how restrictive the market is currently.

Yet despite that amazing streak of good fortune for all of Florida, insurance companies are still raking in huge profits while increasing the premiums we Floridians have to pay on insurance.

What are the insurance companies doing with those premiums? According to the Miami Herald, high ranking officials at Citizens enjoyed lavish dinners and outings at our expense.

How lavish? Citizens executives spent nearly $9,200, including two nights in a boutique hotel and a $234.91 dinner for three at an award-winning French restaurant. Other instances of financial abuse included traveling executives often staying in luxury hotels costing as much as $600 a night even when less expensive accommodations were available nearby. Many Citizens executives dined at fancy restaurants and repeatedly spent more than $50 per person on such fare as rack of venison, sea bass and dungeness crab.

If those financial abuses were not enough, State Farm is under even greater scrutiny. State Farm Insurance, the nation’s largest home insurer, is currently addressing an ongoing criminal investigation related to how it handled potentially tens of thousands of hurricane claims.

State Farm’s internal documents reveal a clear corporate policy of intentionally denying consumer claims for roof damage originating from wind storms. The systematic denial of those types of claims may have quietly saved State Farm close to $1 billion.

State Farm documents reveal an attempt by State Farm managers to hide the company’s policy of non-payment from state insurance regulators.

Our storm damage attorneys are not surprised at the insurance companies conduct. If you have sustained property damage then contact us today to discuss your rights.

So far this year there have been four named storms, including one hurricane and three tropical storms. Any of these storms are strong enough to do significant damage. However, none of them reached South Florida.

Tropical depressions are storms with winds of up to 38 mph and are identified only by numbers; tropical storms are given names and have winds form 39 to 73 mph and hurricanes have winds above 74 mph.source site Storms so far in 2012 have included: http://truecom.com/index.php/home/52-nieuws/203-forrester -Tropical Storm Alberto: Reached speeds of 60 mph and one of the earliest named storms in recent history having formed before the official start of hurricane season. -Tropical Storm Beryl: Speeds of 70 mph. Beryl made landfall in Jacksonville Beach, Florida. It was the strongest landfall in the United States for any pre-season Atlantic tropical cyclone on record.-Hurricane Chris: The first hurricane of the season reaching strength of 75 mph.-Tropical Storm Debby: Reached speeds of 60 mph and dumped a ton of rain on Tampa and Jacksonville.

Our Miami hurricane damage lawyers urge you to take the South Florida hurricane season seriously and properly prepare for the safety of you and your family. Our staff will be available around the clock in the event of a serious storm and can assist you in filing claims or handling disputes with your insurance carrier.

Storms are named in order of the alphabet each year, except for the letters q, u, x, y, and z, which are omitted. Whenever a storm causes serious damage, like Wilma or Katrina, the name is retired and replaced.

For instance, a home may be worth say $200,000 in today’s market. But many insurance companies, including Citizens, may require that homeowner to purchase insurance regarding the replacement value of that home that is far greater than the home is worth. Such values may even be as high as $300,000 despite the fact that the home is only worth say $200,000 in today’s market.

It seems that the insurance companies are greatly exaggerating the cost to replace a home following a disaster. Especially in light of our declining real market.

The only conclusion that can be reached is that insurance companies are using the increased replacement costs values as a back door method to secure greater rate increases above and beyond the rate increases that were already approved just a few months ago. The below news report video discusses that in greater detail.

Not surprisingly, the insurance companies see nothing wrong with requiring home owners to purchase the replacement value coverage for their homes at values that are in some instances twice as much as what the home is actually worth. They deem such rate increases as “necessary and proper.”

Of course, the fact that Florida has not been hit by a hurricane in a record 6 straight years did not lessen the need for insurance companies to further raise insurance rates. Their reserves are teetering on dangerously low levels that could spill heartache and frustration for many homeowners should Florida experience another hurricane season like the ones in 2004 and 2005.

The rates are going up despite the insurance companies getting their wish list enacted by an insurance friendly Governor to help them make consumer claims more difficult to make, but yet those same insurance companies reap the benefits of higher insurance premiums.

State insurance regulators approved more than two dozen home insurance rate hikes ranging from 6 to 34 percent.

American Integrity Insurance Co. of Florida, which has 102,091 home insurance policies statewide and 13,575 in Broward, Palm Beach and Miami-Dade counties, received 14 percent increases for two types of homeowner insurance policies it offers. Security First Insurance, with 119,205 policies statewide and 21,025 in South Florida, received a 9 percent increase for its homeowners multi-peril policies. And Universal Insurance Co. of North America, which has 81,834 policies statewide and 11,420 in South Florida, received a 12 percent increase for its homeowner property insurance policies.

Premiums for most parts of South Florida will increase next year by up to 10 percent. Fortunately, this is significantly lower than the proposed 25% rate increase Citizens was hoping to get.

Why Are Insurance Rates Going Up?

Despite a record 6 straight years without a hurricane strike in Florida, and the passing of sweeping insurance reforms, insurance companies are still raising rates at a blistering pace.

Insurance companies are of course companies driven by profit. They also have to manage their books to ensure that enough money is in reserve in the event a major hurricane does strike Florida.

However, regulators and consumer advocates have said that Florida insurers could bolster their claims-paying reserves during hurricane-free years if they spent less of the premiums they collect on contractors, sometimes affiliated companies, to manage daily operations; if they lowered other overhead costs such as advertising; or issued smaller dividends.
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Our Miami insurance dispute lawyers handle insurance claims for homeowners. Our attorneys represented insurance companies before 2006, when we opened a firm dedicated to fighting for the rights of consumers. We understand how insurance companies work. And we have the knowledge and experience necessary to represent homeowners in disputes over an insurance claim.

According to recent news reports, the number of troubled property and casualty insurers in Florida is growing.

Thirty Five (35) insurers in Florida were given a grade of D or F. That is up from 29 with poor grades on December 31. And one of those companies – Argus Fire and Casualty Insurance Company – has since closed its doors for business by Florida regulators.

Surprisingly, State Farm Florida Insurance Company had a D rating. It is surprising because State Farm is one of the largest insurers in the State of Florida. Also, and despite not having a storm hit Florida in over 5 years, and having $221 million in net premiums, State Farm lost $27 million.

Universal Property & Casualty Insurance was the largest insurer rated E+. It had $18.1 million in net premiums in the second quarter and earned $3.4 million. Meanwhile, Sunshine State Insurance Company was the only insurer in Florida that earned an E rating.

On the other end of the spectrum, Citizens earned an A+ rating. American Family Home Insurance Company and American Strategic Insurance Co. each earned B+ ratings.

These figures are surprising since Florida has not experienced a direct hit by a hurricane in years, and Florida has dodged a major loss event in the past few years as well. Yet despite years of dodging a major hurricane, few insurance companies have managed to build up sizeable reserves.

It is very concerning that in the wake of record increases to homeowners’s insurance rates throughout the State of Florida, coupled with the lack of a significant event in the past several years, that so many insurance companies are still not financially healthy. Indeed, Allstate was requesting rate hikes in excess of 30%. Should Florida be hit with a major storm it may result in many insurance companies going out of business.

Additionally, the many changes that were recently passed into law with the promise of lowering insurance rates and strengthening the insurance companies have not come to fruition.
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Two Florida insurance companies are seeking large rate increases for many already cash strapped Florida homeowners. Allstate’s Castle Key Insurance Company is seeking to raise insurance rates by as much as 31% for Florida homeowners, while its sister company, Castle Key Indemnity is seeking a rate increase as high as 36%.

Castle Key Insurance has close to 140,000 insurance policies statewide as of the end of last year, including close to 32,000 in Broward, Palm Beach and Miami Dade County. Castle Key indemnity has close to 126,000 insurance policies, including 21,000 in South Florida.

While the two companies have close to the same number of policies, Castle Key Insurance reported a claim paying reserve of 136 million at the end of last year while Castle Key Indemnity reported less than 15 million.

The insurance companies claim that the cost of reinsurance is rapidly rising and its losses and expenses have so far exceeded the premiums it collects and that it’s projected to increase with out a rate hike.

State regulators have until August to reject the increase, approve it, or approve a smaller increase.

This premium increase comes after six years of no hurricanes and when the property and casualty insurance industry has record profits. Profits for U.S. property and casualty insurers rose 63 percent to $27 billion for the first nine months of 2010.

Consider Your Options. Contact Us Today.

Before opening our law firm in 2006, our attorneys worked for some of the state’s, and nation’s, largest law firms, and worked representing the insurance companies for years. Our attorneys are now uniquely positioned to use that experience to assist individuals and businesses alike throughout Florida with their insurance claims. As a result, our attorneys are well versed in the impact insurance has on businesses, condominiums, and individuals alike. Our insurance litigation practice group is prepared to tackle your insurance claim.

Given our extensive experience litigating for, and against, insurance companies, our insurance litigation practice group is prepared to provide aggressive, efficient and effective representation on a broad spectrum of insurance claims in Florida for local, national, and international clients. We are prepared to advocate insurance claims at the pre-suit stage, trial, appellate and arbitration levels.